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GBPNZD: 600-Pip Move on the Horizon?

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Just yesterday we looked at EURNZD. I highlighted the upward sloping flag that’s been developing since December of last year.

As you probably know, EURNZD and GBPNZD often move in tandem. A pattern that forms on one is usually visible on the other.

This time is no exception.

Where EURNZD is still about 100 pips below new resistance though, GBPNZD is testing it as I type this. In fact, yesterday’s session was the first test of 1.9270 as support turned resistance.

GBPNZD ascending channel

But before you rush off to sell the pair, there are a couple of things to keep in mind.

First, the daily mean as represented by the 10 and 20 EMAs is nearly 200 pips above the current price. That suggests we could see a bit more consolidation before the next leg lower.

Second, this is a pound cross. That means Brexit-induced volatility is going to be a risk factor you can’t ignore.

The solution for the first point above is simple: wait.

If you’re concerned about the current distance below the 10 and 20 EMAs, a little bit of patience is all you need.

As for the second consideration, all I can say is you’ll probably want to reduce your risk or avoid the pound altogether.

Only you know what’s best. I can’t decide for you.

What am I doing?

I’m going to stay on the sideline for now. I will most likely also require some form of bearish price action before considering an entry.

As long as GBPNZD trades below that 1.9270 area on a daily closing basis though, the pound cross is vulnerable.

If you want to trade price action like the pros, you need the charts the pros use. That means New York (5 pm EST) close. Get yours here.

Key support comes in at the June lows near 1.8920. A daily close below that would open the door to the year-to-date low at 1.8617.

The latter is the final objective for this upward sloping flag. That gives you at least 600 pips to work with.

Alternatively, a daily close back above new resistance at 1.9270 would negate the bearish outlook.

Important: I use New York close charts so that each day closes at 5 pm EST.

Click here to get access to the same charts I use.

GBPNZD support and resistance levels

Leave a Comment:

21 comments
POLA P says

nice one..thanks

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Tebogo Molefe says

Thanks justin

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Colin de Ste Croix says

I just had a good profit win on this pair and my rule is NOT to go back to the well for a while. And Brexit of course!!

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Agrey W Wihala says

Hi Mr Justin hope your doing well, a’m asking For how long the price can meet the support 1.8920 in daily time frame of GBPNZD?

Reply
    Justin Bennett says

    Only the market knows the answer to that. I don’t see any advantage in trying to guess how long it might take.

    Reply
Lương Kiều Sơn says

Thanks Justin! You analyze as predicted below the support area. Wish you and your family more health, happiness.

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Justin says

Agreed. There may be longer term pain for EurNzd however without some key driver south the probability of a mean reversion move higher is more likely in the short term. Not only based on distance from the mean, but also based on average time spent away from the mean.

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Florian says

Hello, how can I join your course? Can I get your course for free If I join with your sponsored Broker?

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Nelson says

“First, the daily mean as represented by the 10 and 20 EMAs is nearly 200 pips above the current price. That suggests we could see a bit more consolidation before the next leg lower.” Does this mean the 10 and 20 EMAs has to be closer to price before a bearish move is confirmed?

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    Justin Bennett says

    Nothing “has” to be anything for the market to move. It’s always a game of probabilities.

    Reply
Ufoo says

You build me up everyday Eric. And at no cost. Your help is priceless. Gracias muchos

Reply
    Justin Bennett says

    Not sure who Eric is, but you’re welcome. 🙂

    Reply
Jenerali says

thanks justin

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Nelson says

See how the Pound dropped massively following news release.

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prasanna says

thanks a lot bro ; far better than all those trading systems which keep promising the moon & don’t deliver.Your analysis is simple & practicle.Plj.keep posting bro & God bless.

Reply
    Justin Bennett says

    You’re welcome. Glad it worked out for you.

    Reply
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